Shares of Bombay Dyeing Ltd. zoomed 20 per cent on Thursday after the company said that it will be monetising its 22 acre land parcel in Worli to Goisu Realty Pvt. Ltd. The transaction will be done in two phases for a total consideration of Rs 5,200 crore.
The first phase will see the company receiving Rs 4,675 crore, while the rest will be received upon completion of certain conditions as set out in the definitive agreements.
The board of directors of the company approved the proposal to sell the land parcel of about 22 acres (along with the associated FSI) in Worli, Mumbai to Goisu Realty Private Limited (a subsidiary of Sumitomo Realty & Development Company Limited) in 2 phases, for a total consideration of about Rs 5,200 crore, subject to approval of its shareholders.
Post shareholders’ approval the company will receive about Rs 4,675 crore from the buyer for Phase-I and balance amount of about Rs 525 crore upon completion of certain conditions by the company and execution & consummation of the definitive agreements thereto for Phase- II.
The board decided to convene an extra-ordinary general meeting (EGM) of the members of the company and a notice for the same will be circulated in due course. The agreement for sale (phase I) is expected to be entered on or before September 30, 2023 and for phase II by Q423-24.
On completion of the proposed transaction, the company anticipates recording a pre-tax profit exceeding Rs 4,300 crore. Importantly, it will be able to eliminate all its existing borrowings, thereby curbing interest costs and unshackling encumbered assets, as per company’s regulatory filing.
Furthermore, the move opens the door for potential dividend payouts in the future. With a solid treasury balance at its disposal, the company is well-equipped to fund upcoming real estate projects, solidifying its presence and growth trajectory in the real estate sector.
Meanwhile, the board also approved the development of the unutilized land parcels available to the company. According to the company, these land parcels will create about 3.5 million square feet of residential and commercial property and generate a revenue of about Rs. 15,000 crore over the next few years.
The Bombay Dyeing and Manufacturing, established on August 23, 1879, is engaged primarily in the business of real estate development, polyester staple fibre, and retail.
The Wadia Group, started in 1736, is among India’s oldest conglomerates. It has a diverse portfolio spanning various industries such as FMCG, real estate, textiles, chemicals, and food processing. The group has a long-standing presence and significant expertise in these sectors.
Comments
0 comment